Israel’s response to the October 7 massacre led to a sharp outbreak of antisemitic phenomena around the world which has sent shockwaves throughout Jewish communities, causing many people to think about Aliyah and take interest in buying an apartment in Israel, as a first step toward that. Experts believe that after the war, this interest is likely to lead to real deals, but also believe that the state should take various actions to encourage Diaspora Jewry to purchase homes in Israel, such as reducing the high purchase tax or allowing communities to stay together.
The outbreak of the Iron Swords War naturally led to a significant decline in the level of demand for home purchases by Israelis. Beyond the fact that in times of such a severe crisis, people do not tend to make decisions and carry out significant moves such as buying an apartment, practically – thousands of citizens have been drafted into reserve duty and are unable to do so.
Last week, the Ministry of Finance published, according to preliminary data collected for October 2023, that the number of home purchase transactions during the month was lower than in April 2020, when the first lockdown due to the COVID-19 pandemic was declared, and most of the public was confined to their homes.
Nonetheless, as the weeks pass from October 7, there is an apparent increase in the level of interest in homes in Israel, even if this still does not necessarily translate into actual deals. However, unlike the situation before October 7th, this time Diaspora Jewry is a significant factor in this renewed interest. This is because, since the beginning of the war, Jews outside of Israel have been suffering from a gigantic increase in the number of antisemitic incidents and crimes.
According to data published last week by the Jewish Agency’s Aliyah and Absorption Unit, there was an increase of hundreds of percent in the opening of Aliyah files, which constitute the first stage of real immigration to Israel. According to the data, the most significant jump occurred in France, where about 450 immigration files were opened during October 2023, five times more than 90 in the same month last year. North American countries opened 150 cases in October, almost double the 80 opened this month last year, and in the UK 60 files were opened compared to 40. Jewish Agency Chairman Doron Almog said in a media interview this week that the agency is preparing to absorb about a million immigrants in the coming years.
This trend is also clearly reflected in the number of readers of the Buyitinisrael website. According to the site’s owner and chief editor, veteran real estate consultant Debbie Goldfischer, there has been a marked increase of approximately 35% in traffic and inquiries through the website since October 7. A lot of users have arrived at the site through specific search terms that are related to buying a home in Israel. Most traffic is coming from America, the UK and Canada, followed by Germany, Australia and France. While Before October 7, we received an average of 8-10 inquiries a day from buyers overseas, today that number has more than doubled”.
As for the reasons for this trend, Goldfischer, who herself made aliyah from England several years ago, gives a firm answer: Undoubtedly, the rise in global antisemitism — the outward and growing display of hatred and threats toward Jews, on university campuses and in Jewish neighborhoods, has prompted many people to start thinking about the security of their families and their long-term future outside of Israel”.
“Outward and growing display of hatred and threats toward Jews, on university campuses and in Jewish neighborhoods, has prompted many people to start thinking about the security of their families and their long-term future outside of Israel.”
Debbie Goldfischer — Editor, Buyitinisrael
In addition to the increase in interest, are you now also noticing an increase in actual home purchase transactions?
“At this stage, I believe the inquiries through the website and increasing readership are due to fear as they see such open and vehement antisemitism, with people attempting to gain an initial understanding of the local real estate market and seeking information on the purchasing process. To date, we have not seen a significant increase in purchasing activity, but when please G-d, things quiet down, we expect a surge. Also, most people are afraid to travel during the current conflict, some are unable to get travel insurance due to Israel being classified as a “war zone”. Once people are able to travel more freely, we anticipate huge activity among foreign buyers”.
Adv. Jane Olman, Partner at Rachlin-Olman Law Offices in Jerusalem, who specializes in handling real estate transactions of foreign residents, has also sensed a sharp increase in interest: “Rising antisemitism abroad has shaken Jews everywhere to the core. People, now more than ever, realize that ultimately, Israel is the only safe port in the storm and that is making many people consider a purchase in Israel. Especially with the ability to more readily commute remotely to jobs abroad, it is becoming easier to make the transition to Israel. In addition, buying property in Israel during times of crisis is the ultimate show of support and confidence in Israel’s future. Of course, a strong dollar also helps encourage investment in Israel”.
She added, “All real estate professionals have seen an uptick in interest since the start of the war, especially in more typically Anglo areas such as Jerusalem. In fact, due to such high demand, I am traveling to the US to give lectures on real estate in Israel, which we had originally canceled once the war broke out. We decided to go after receiving so many inquiries from American clients”.
However, both Goldfischer and Olman believe that despite antisemitism and the increased motivation of Jewish communities abroad to purchase property in Israel, they still face a number of significant obstacles.
“I believe that the greatest obstacle to buying is the price level of homes in Israel”, says Goldfischer, “Most people are not ready or able to make Aliyah right now, but they’d be interested in purchasing a home in Israel for the future. However, given the price of apartments here, it would require them to sell their existing home in the US or UK, which they are not prepared to do.
“Incentives that encourage only foreign residents to purchase, especially in Jerusalem and the center of the country, would be unfair to Israelis. However, in my opinion, the government should encourage foreign buyers to purchase collectively in peripheral areas that are less expensive. This would be a win-win-win situation for the buyers who could come in at affordable prices with a group of like-minded people, for the developers who are struggling to sell to local buyers in the current climate, and for the neighborhoods that they buy into who’d welcome a high-socio economic level of buyers from abroad”.
Olman believes that steps are needed in the field of taxation: “Relaxing the prohibitive purchase tax and passing measures to encourage real estate investment would be very helpful in facilitating more people to buy a home here. Also, there is a lack of apartments available for rent because the taxes are so high for Israeli residents buying a second property, meaning that most homeowners live in the property they buy. If more rentals were available, the rents would be more affordable, which would especially help young couples and families.
Unfortunately, Olman maintains, “Israel has tried numerous times to drive prices down by discouraging investment in real estate through high taxes but it has never proved effective. With record prices and high-interest rates, lowering taxes would help open the door for many people trying to get a foothold in Israeli real estate“.
Everybody wants a Buyitinisrael, now more than ever before. Whether you’re thinking about Aliyah, looking for a home or a haven, or want to support the Israeli economy, drop us a line, when you’re ready to talk. Whatever the reason, Buyitinisrael.
